Ian Copsey is a veteran analyst having begun his career in Forex 28 years ago. He is author of "Integrated Technical Analysis" and his new groundbreaking book "Harmonic Elliott Wave." He provides his popular daily forecast “The Harmonic Daily Forecaster” through his website www.harmonic-ewave.com.

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HARMONIC ELLIOTT WAVE

Wednesday, March 9, 2011

The correction is set to continue…

I was quite content with yesterday’s moves, in particular with the losses in EURUSD although the earlier pullback was slightly more stunted than I had expected. Overall, however, the Dollar does appear to be showing its strength and actually all 4 majors were correlated in this. I still think there’s more to come though perhaps with a little less correlation but basically with the need for the Dollar to remain overall buoyant for now. Do remember though, this should just be a correction.

It looks like EURUSD will be the purveyor of greater volatility and it’s this which could provide some confusion over the day. This pair looks as if it could generate an early marginal new low and then retrace back to a little higher. If there is anything different to all this then it will be that the correction higher will develop more directly.

Indeed, this second option should not be ignored as it does appear to be the pattern for the other 3 majors. These appear to have hit their initial targets and are currently going through their own corrections already. Given that EURUSD did reach its minimum target it is quite possible that I am looking for a little too much from it – so keep flexible on this.

USDJPY also extended gains and these look set to continue after a brief pullback. The larger consolidation I have highlighted does seem to be on track. Of course, this generates an impact on EURJPY and this does look critical. The cross has been hovering above the retracement support I have been highlighting and may even reach that. The implication for this support is crucial, a higher target being generated. Here there is a question mark being raised since this higher target is going to require both EURUSD and USDJPY to be strong. If both pairs manage to find their highs at the same time then the higher target is possible. However, we should keep in mind that the minimum upside targets were met with the 115.98 high – right now, all we’re fussing about is whether this can make a higher high before it reverses. Momentum suggests it can but be aware of the risks…

AUDUSD remains bearish. USDCAD is finding the bullish correction very hard to maintain. It does seem as if today it must generate gains else slide down to its eventual targets…

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About Ian

I have been around in financial market for over 30 years, the last 23 years as a technical analyst. I focus heavily on price development and structure as it is the only way to generate accurate support and resistance. I use my own adapted form of Elliott Wave along with derivatives of Fibonacci and harmonic ratios to derive support and resistance. I provide a range of reports covering daily & weekly Forex, U.S. Indices.